Wealthsimple vs M1 Finance


2022: M1 Finance versus Wealthsimple for online investing. Compare cost, brokerage fees, IRA accounts, and differences. Which firm is better?



Update


Wealthsimple does not accept U.S. customers anymore and is only open to Canadian residents. Learn more in WealthSimple review.

M1 Finance is only open to U.S. legal residents and does accept Canadian residents. Learn more in M1 Finance review.


Promotions


M1 Finance: Up to $500 cash bonus for funding account at M1 Finance.

Wealthsimple: Get first $5,000 managed for FREE at Wealthsimple.



Overview of M1 Finance vs Wealthsimple


Wealthsimple and M1 Finance are both modern brokerage houses with cash management tools. The similarities stop there, however, as these two deliver very different types of investment services.


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
M1 Finance $0 na na $0 $0
Wealthsimple $0 na na 0.50% 0.50%


Style of Investing


Wealthsimple is a robo advisor with old-school add-ons. The automated investing feature starts at 0.5% of assets per year with no minimum balance. The digital advisor performs auto rebalancing at no charge.

Although Wealthsimple is headquartered in Canada, it now accepts applications from US and UK residents. Features for foreign accounts may differ, however.

M1 Finance only accepts applications from legal US residents. Instead of robo management, the broker-dealer provides investing in what it calls Pies. These are assortments of stocks and ETFs categorized by various themes. Pies can be custom-built by M1 customers. The ones the broker creates are auto rebalanced.

There is no charge at all to use M1’s service, although human advisors cannot be consulted. This is possible at Wealthsimple with a sufficient account balance.

It’s possible to trade individual stocks and ETFs at either brokerage firm without paying any commissions.

M1 Finance is free so it beats Wealthsimple in this category.


M1 Finance


Banking Tools


Canadian residents (only) can open a Wealthsimple Cash account. There is no annual or monthly fee, and the account pays 0.9% in interest currently. The company promises zero foreign transaction fees soon. What we really like about this account is bill pay and unlimited ATM fee rebates (throughout Canada only). A tungsten metal card is standard.

Over at M1 Finance, there is M1 Spend. The account is similar to Wealthsimple Cash, although there is no tungsten card, and the broker only reimburses one ATM fee per month. For a $125 annual fee, M1 reimburses 4 ATM fees per month. Paying the annual fee will also net you a 1% annual yield and a 1% cash back program.

Since banking at M1 Finance is available to U.S. customers, we favor it in this category.


Trading Software


Wealthsimple customers get to use a user-friendly mobile app, available on both Android and Apple phones. The software offers recurring deposits and account management tools. A website login does the same.

Over at M1 Finance, we found a similar setup: an app for phones and a basic website. It’s possible to scroll through the broker’s Pies or to construct your own on either platform.

Because both brokers emphasize low-cost automated investing, both software setups are rather basic, but easy to use.

Overall, pretty close here.


Wealth Simple Interface


Tax Filing


Wealthsimple Canadian clients can use SimpleTax to file their tax returns for free. The software offers several useful tools, like a refund optimizer and an RRSP calculator.

M1 Finance doesn’t offer any tax filing service and so loses this category.


Fractional-Share Trading


M1 Finance investors can buy and sell fractional shares of a single stock or ETF. This is possible by putting just one stock or ETF in a single Pie and then investing a whole-dollar amount in the single Pie.

Wealthsimple fails here because it doesn’t offer any method to purchase fractional shares of securities.


Other Services


Dividend Reinvestment Program: Both brokerage firms in this survey offer free dividend reinvesting services based on Modern Portfolio Theory. The way it works is that a computer program will take a cash dividend from one security and use it to purchase the worst performing security in the portfolio.

Retirement Accounts: Wealthsimple customers located in Canada can open RRSP, TFSA, RESP, RRIF and LIRA accounts. M1 Finance clients can open Traditional, Roth, Rollover, and SEP IRAs. The SIMPLE account is not available, nor is a 401k.

Automatic mutual fund investing: Neither broker offers this service because mutual funds are not available.

Wealthsimple has a slight lead here.


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Our Recommendations


Stock and ETF Trading: Because of M1’s whole-dollar investing service, it gets our stamp of approval here.

Beginners: Both brokerage firms seem decent for new traders.

Long-Term Investors and Retirement Savers: M1 Finance has target-date Pies, while Wealthsimple offers financial planning with old-school advisors, personalized financial reports, and discounts on Medcan health plans. These services come at a steep price, though.

Small Accounts: M1 Finance is free while Wealthsimple charges annual fee.


Promotions


M1 Finance: Up to $500 cash bonus for funding account at M1 Finance.

Wealthsimple: Get first $5,000 managed for FREE at Wealthsimple.



Wealthsimple vs M1 Finance - Judgment


M1 Finance outperformed Wealthsimple overall.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.